The planned sale is intended to be part of a series of actions to reshape Peabody's portfolio and increase proceeds through sales of non-core assets.

“Peabody continues to evaluate its portfolio to target the best market base, with a filter that includes strategic fit, value consideration, growth and cash requirements as the company turns greater focus on its core mining assets in the Powder River Basin, Illinois Basin and Australia,” the company said.

Peabody has entered into a definitive agreement to sell the subsidiary holding its 5.06% share of the Prairie State Energy Campus in the US to the Wabash Valley Power Association for $57 million.

The definitive agreement was entered into following a competitive bidding process Peabody launched in the fourth quarter of 2015 as part of the company's emphasis on portfolio optimization and sale of non-core assets.

Prairie State is a 1,600 megawatt coal-fueed electricity generation plant and adjacent coal mine in Washington, St. Clair and Randolph counties in Illinois, which started operations in 2012.

It is one of the cleanest coal-fuelled plants in the nation and the lowest-cost coal plant in one of the world's largest energy and operating reserve markets, the company said in a statement.

Peabody expects to use transaction proceeds for general corporate purposes and deleveraging activities, and expects to record a modest gain related to the sale.

The planned sale of the Prairie State interest, along with other recently announced or enacted transactions, would bring total proceeds from asset sales to nearly $500 million since the beginning of the second quarter of 2015.

During the last three quarters of 2015, the company realized cash proceeds of nearly $US70 million related to its ongoing resource management activities through the sale of surplus land and coal reserves.

In the fourth quarter, Peabody entered into a definitive agreement to sell its New Mexico and Colorado assets for $358 million in cash.

The transaction would bring forward multiple years of cash flows and release the company of approximately $105 million of liabilities. The sale recently received Hart-Scott-Rodino regulatory approval, the purchaser is currently arranging for financing, and closing is expected within the first quarter.